Turkish inflation was lower than expected at 44.38 per cent annually and 1.03 per cent on a monthly basis in December, data showed on Friday, in a month in which the central bank launched an easing cycle after an extended battle to cool inflation.
Month on month, inflation was 1.03 per cent, the Turkish Statistical Institute said, down from 2.24 per cent in November. Annual consumer price inflation (CPI) was 47.09 per cent in November.
Education, housing and restaurant prices led the rise in the annual print while furniture and telecoms-related prices were up the most from the previous month, according to data.
In a Reuters poll, the annual inflation rate was expected to fall only to 45.2 per cent, with the monthly figure seen at 1.61 per cent.
The latest inflation print hit the central bank’s midpoint target of 44 per cent for year end. Annual inflation in December was the lowest since mid-2023.
The bank, having kept its main interest rate steady at 50 per cent since March, launched an easing cycle last week, cutting the policy rate by 250 basis points to 47.5 per cent. It had begun tightening policy in mid-2023.
The bank said it will set policy “prudently” meeting by meeting with a focus on the inflation outlook while responding to any expected “significant and persistent deterioration”.
With the decline in inflation, the central bank is seen to continue with the rate cuts this year, economists say.
Finance Minister Mehmet Simsek said inflation will keep falling and hit this year’s targets “with the increasing support of fiscal policy, the decrease in rigidity in services inflation and the improvement in expectations”.
The Reuters poll showed annual inflation falling to 26.5 per cent at end-2025. The central bank sees inflation falling to 21 per cent at the end of this year.
Prices in coming months will be affected by new-year administered hikes and the 30 per cent rise in minimum wage, which was less than requested by workers.
While most taxes and fees are updated with the usual inflation coefficient in 2025, the government hiked a tax on fuel, which has a major impact on overall prices, by a lower 6 per cent as of January as part of the disinflation program.
The domestic producer price index was up 0.4 per cent month on month in December for an annual rise of 28.52 per cent, the data showed.
The Turkish lira was little changed after the data at 35.3850 to the dollar, hovering around the record lows.
